Apache faces more investor activism

Houston-based Apache Corp. (NYSE: APA) faces a new wave of investor activism with a New York investment firm announcing it has acquired a $1 billion stake in the energy exploration and production giant.

Investment firm Jana Partners LLC is pushing Apache to further divest from its international assets and focus even more intensely on its onshore U.S. shale production.

"Investors are unimpressed by [Apache]'s global diversification and have voted with their feet," Jana wrote in a letter to investors that was perused by The Wall Street Journal.

Energy investment bank Simmons and Co. International in Houston noted that Apache will "push back on Jana" by pointing out that its international assets generate free cash flow that supports U.S. production growth. Apache also can note the divesting it has already done. Jana will make the case that Apache's Permian Basin assets are undervalued and that the company needs more focus.

Apache spokesman Patrick Cassidy said in a statement that Apache will "welcome" Jana's investment.

"Apache's board of directors and management team value open communications with its shareholders and constructive input toward the goal of enhancing value for all Apache shareholders," Cassidy stated. "We are focused on continuing to execute our strategic plan to rebalance our portfolio and to focus our strategy on more predictable and profitable production growth in our North American onshore assets. These efforts have resulted in the divestiture of more than $10 billion of assets over the last 18 months. We will continue to take actions to enhance shareholder value."

Apache is the Houston area's 10th-largest public company ranked by its 2012 revenue of $17 billion, according to Houston Business Journal research.

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